English translations are being added article by article. The Chinese collection contains 858 articles; 736 currently have a full English translation. Dates refer to the original posts.
Venture Capital & InvestingFeaturedEnglish translation
Robin reflects on the nature and mission of venture capital. VC means continually finding underserved needs, looking at larger markets, and using first principles to see beneath the surface and identify more disruptive opportunities. Capital accelerates and catalyzes the development of an industry. Early-stage investing requires working at the frontiers of technology, markets, and business. Practitioners need to stay young at heart, keep an open mind, continue learning, and exchange ideas with younger people. Robin sees VC as a force that helps capable entrepreneurs realize their dreams faster. Beyond financial returns, it should carry a sense of mission: helping bring about change in the world is valuable in terms of both social impact and influence.
Key points
The essence of VC: finding underserved needs and potential opportunities.
The approach: first principles, looking beneath the surface, and seeking disruptive opportunities.
What practitioners need: a youthful mindset, openness to learning, and a willingness to work at the frontier.
A sense of mission: helping change the world, beyond financial returns.
Robin considers Shopify the closest comparison to 91APP. At the time, Shopify had a market capitalization of US$140 billion, a price-to-earnings ratio of 738, and a price-to-sales ratio of 56, while 91APP offered more functionality and had greater ambitions in online-merge-offline (OMO) commerce. His broader concern is what this means for Taiwan’s capital markets. Regardless of whether someone uses 91APP’s products or services, he hopes its entry into Taiwan’s capital markets will encourage more Taiwanese SaaS companies to move forward and break free of a hardware-centered mindset. Beyond a technology landscape dominated by TSMC, Taiwan needs new opportunities for transformation, and Robin sees 91APP as a pioneer opening that door. The valuation figures reflect December 2020.
Key points
Shopify had a market capitalization of US$140 billion and a price-to-sales ratio of 56 at the time in 2020.
91APP offered more functionality and had greater ambitions in OMO commerce.
Encourage Taiwanese SaaS companies to move beyond a hardware-centered mindset.
91APP was opening the door to Taiwan’s capital markets for SaaS companies.
Robin says startup strategy means figuring out the single most important thing to do, and choosing not to do the other 99 things that also seem important. This is not a question of deciding which tasks come first and which come later. It is about recognizing that there is only one most important thing.
Key points
Figure out the single most important thing to do.
Choose not to do the other 99 things that also seem important.
This is not about sequencing tasks; there is only one most important thing.
Robin says the familiar advice to keep going and never give up is incomplete: it leaves out the need to be heading in the right direction. Many entrepreneurial journeys resemble being lost in a desert. Those who make it out alive rely on more than persistence; they also need a compass.
Key points
“Keep going and never give up” leaves out the need for the right direction.
Many entrepreneurial journeys resemble being lost in a desert.
The preface to Blitzscaling quotes the famous scene from Glengarry Glen Ross: first prize is a Cadillac, second prize is a set of steak knives, and third prize is getting fired. In social networking, Facebook takes first prize; MySpace may have taken second, but that no longer matters; Friendster takes third—does anyone still remember Friendster? In the internet age, you have to win first prize to survive. Robin’s interpretation is that network effects leave no room for perfect competition or oligopoly, only monopoly: in social networking and search, the leader is far ahead. Competition is brutal and the rewards are enormous, which makes blitzscaling essential. If you move at a leisurely pace and are still not number one when time runs out, there is little left for you.
Key points
In the internet age, first prize is the only prize that matters.
With network effects, there is only monopoly, not oligopoly or perfect competition.
Blitzscaling means taking first place before time runs out; otherwise, you are out of the game.
The pressure investors apply follows the same logic.
Book excerpt (Wan Weigang’s Elite Daily Lessons, relaying Morgan Housel)
Reading guide
Wan Weigang’s Elite Daily Lessons relays Morgan Housel’s model of bubbles: bubbles are not a moral issue; they arise when players with different time horizons are playing different games. First, a company delivers real results and attracts attention. Second, short-term players enter and push up the price. Third, long-term investors mistake short-term price movements for information the market is giving them. Fourth, short-term money leaves and the price collapses. The point is not to decide whether the market is right or wrong, but to know your own strategy and time horizon, and who the other participants are. This model is a tool for understanding, not a tool for timing the market.
Key points
The four stages of a bubble: real results → short-term players enter → long-term players are misled → the bubble bursts.
Long-term and short-term players are playing different games.
Knowing who you are and who the others are matters more than predicting the market.
The model is a tool for understanding, not for market timing.
Reprinted news: CATL reported 2022 revenue of RMB328.5 billion, up 152% year over year, and net profit of RMB30.7 billion, up 92%. Its global market share of EV battery usage was 37%, ranking first for the sixth consecutive year; its share of energy-storage battery shipments was 43.4%, ranking first for the second consecutive year. R&D spending was RMB15.5 billion, up 101%. Robin comments that even before entering venture capital more than a decade earlier, he had reservations about Taiwan’s prospects in the battery industry if competition came down to economies of scale, volume, cost, or even basic-science capabilities. Looking back, he feels those concerns seem to have been borne out. He also jokes that “our Simplo makes a ton of money too.” The financial figures refer to 2022; the remark about Simplo is a personal joke and does not indicate any shareholding or fund relationship.
Key points
CATL’s 2022 revenue was RMB328.5 billion, up 152% year over year, with net profit of RMB30.7 billion.
Its 37% EV battery share put it first globally for six consecutive years; its 43.4% energy-storage share made it first for two consecutive years.
R&D spending was RMB15.5 billion, up 101%; lithium-ion battery sales were 289 GWh.
Robin had reservations more than a decade earlier about Taiwan competing on battery scale and cost, and feels those concerns now seem borne out.
Reprinted shareholder letter (Chinese translation by Vinchent)
Reading guide
This letter was written amid the bursting of the dot-com bubble in 2000, when Amazon’s share price fell 80%. It reports 20 million customers, an increase of 1.4 million; sales rising from $1.64 billion to $2.76 billion; gross margin growing 125%; and $1.1 billion in year-end cash. By every measure, it says, Amazon was in a stronger position than ever. Why, then, did the share price plunge? Bezos quotes Benjamin Graham: in the short run, the stock market is a voting machine; in the long run, it is a weighing machine. The 1999 surge reflected plentiful “votes,” not “weight”; Amazon wanted to be weighed. He also acknowledges the failures of the living.com and pets.com investments and underestimating how hard it would be for single-category online retailers to scale. Looking ahead, he draws confidence from advances in bandwidth, storage, and processors, believing roughly 15% of retail would move online permanently. As usual, he appends the first letter from 1997.
Key points
The share price fell 80%, but every operating measure improved.
Graham: in the short run, a voting machine; in the long run, a weighing machine.
An acknowledgment and review of the failed pets.com and living.com investments.
Long-term confidence supported by technological advances, including a 60-fold increase in bandwidth over five years.
Robin’s commentary (as of June 2024; figures are rough estimates)
Reading guide
Robin makes a rough calculation: reading from age 10 to 80 at five books a day would amount to about 127,000 books in a lifetime (5 × 365 × 70 = 127,750). In reality, someone reading about ten books a year after entering the workforce would read roughly 500 between ages 20 and 70, perhaps 1,000 if especially dedicated. That makes it important to choose carefully rather than read only popular business and management books. Literature, history, philosophy, geography, popular science, and medicine can broaden one’s horizons. He relays a colleague’s view that a narrowly practical reading diet, focused only on books with short-term usefulness, makes it harder to develop deep cultural grounding. He also feels he has lost his own ability to concentrate and read for long stretches.
Key points
A rough reading estimate: a theoretical ceiling of about 127,000 books, versus roughly 500 to 1,000 in practice.
Choose books carefully; do not read only business, management, and motivational titles.
Broaden your horizons with literature, history, philosophy, popular science, and more.
An unnamed colleague’s view: purely utilitarian reading does not build deep cultural grounding.
Reprint (part one of a speech labeled early 2016 by Allen Zhang) + Robin’s recommendation
Reading guide
The first part of a speech labeled early 2016 by Allen Zhang says WeChat’s daily logins exceeded one billion in August 2015, possibly making it China’s first app with one billion daily active users. Its launch screen—a person standing before the Earth—has no standard interpretation: it leaves room for users’ imaginations, with a billion users offering a billion understandings, so it will never change. Robin adds a parenthetical question: hasn’t that Earth launch screen disappeared? A friend calls WeChat an outlier in the internet industry. Zhang is both proud and surprised: simply holding the line on what makes a good product has made it different, because many products treat neither themselves as products nor their users as users. He cites designer Rams’s ten principles: innovative, useful, beautiful, easy to use, unobtrusive, honest, lasting, attentive to every detail, environmentally friendly, and less is more. Software interacts with users even more frequently, so these principles apply equally. He criticizes traffic and monetization KPIs that mislead product managers. Why did Microsoft not put ads on Internet Explorer’s heavily viewed 404 page? If WeChat were a person, it would be your best friend: how could you put an ad on that friend’s face? Despite complaints about WeChat 7.0, he argues that changes should follow design principles and guide aesthetics rather than fall behind the times.
Key points
The one-billion-DAU milestone and the launch screen that would never change.
WeChat as an outlier: simply maintaining the baseline for a good product makes it different.
Rams’s ten design principles apply to software products too.
Product managers misled by traffic KPIs extract value rather than build products.
Don’t put an ad on your best friend’s face: the reason for avoiding launch-screen ads.
Persisting with a major redesign despite criticism: guide aesthetics rather than try to please everyone.
Robin’s commentary (as of September 2020; prices are estimates from that time)
Reading guide
Responding to online complaints that Formosa Chang is “expensive” and “raising prices,” Robin argues that a set meal at NT$120–150 still costs less than many Japanese ramen or pasta dishes. Wanting higher wages while rejecting businesses’ price adjustments is a paradox. He advocates allowing prices to adjust as the economy grows and wages to rise alongside them. Businesses should be encouraged to make good products, earn reasonable profits, and treat employees well. Consumers, too, should value good products over cheap, poor-quality ones, creating a virtuous cycle.
Key points
Set meals were estimated at NT$120–150 in 2020; these are not current prices.
Wanting higher wages while rejecting businesses’ price adjustments is a paradox.
Suppressing prices also suppresses wages, creating a vicious cycle.
Encourage good products, reasonable prices and profits, and fair treatment of employees.
Robin’s commentary (opening section is a book excerpt; original source remains to be confirmed)
Reading guide
Robin cautions entrepreneurs against skipping critical early steps, especially customer discovery. The most important starting point is not finding money, assembling a team, developing technology, building a product, or planning a business model: it is confirming the needs of target customers. He identifies another warning sign. You set out to do A, discover after testing the market that A will not work, and decide you first need B to make A possible—then add C. The most likely outcome is that neither A nor B succeeds. You may not recognize this, because one of entrepreneurship’s greatest traps is deceiving yourself.
Key points
Confirm target customers’ needs before building the product.
When the original A does not work, continually adding B and C only takes you farther from the goal.
One of entrepreneurship’s greatest traps is self-deception.
Robin’s commentary + quoted excerpts (external source identified by the tag #OnlyIndustryMonopolyBringsRealPricingPower; September 2022)
Reading guide
Robin uses Google, Tripadvisor, and Agoda as examples. Google used to be the first layer, search; Tripadvisor the second, reviews; and online travel agencies (OTAs) the third. But Google keeps moving downstream, forcing OTAs to move upstream. The quoted second half lists four characteristics of internet businesses: a natural tendency toward monopoly, the need for sustained high growth, a disruptive nature that lets one expansion support the next, and greater pressure to turn a profit amid a worsening market environment. As a result, internet companies expand horizontally and vertically. Their thinking shifts from “What can I do?” to “What should be done?” That is why technology giants move into finance, automobiles, and healthcare.
Key points
Google, Tripadvisor, and Agoda illustrate platforms expanding into one another’s upstream and downstream activities.
The excerpt’s four characteristics: natural monopoly, high growth, using one expansion to sustain the next, and profit pressure.
Platforms’ thinking shifts from “What can I do?” to “What should be done?”
The quoted section comes from an external article identified by the tag; it is not Robin’s original writing.
Reprinted book excerpt (tagged #DedaoAudioBookNarrativeEconomics; discussing Harari’s Homo Deus) + Robin’s commentary (February 2026)
Reading guide
This post reprints an essay about the narrative of “machines replacing humans.” In Homo Deus, Harari proposes that the most important economic question of the twenty-first century is how to create jobs for “useless people,” envisioning a small elite using technology to become “Homo deus.” The essay says this narrative dates to Aristotle, while the Industrial Revolution shows that machines both destroy and create jobs. The possible difference this time is that earlier machines replaced physical labor, whereas future intelligent machines aim to take over mental work across the board. Robin ends with a question: once printing became widespread, copying manuscripts by hand disappeared, but humanity moved to another stage. Are humans now being replaced, or are we on the eve of a new chapter? Harari’s predictions are relayed by the essay as hypothetical scenarios, not facts.
Key points
Reprinted excerpt: Harari proposes a hypothetical “useless class.”
Reprinted excerpt: machines replacing humans is a long-running narrative; during the Industrial Revolution, machines both destroyed and created jobs.
Reprinted excerpt: intelligent machines may make this time different by taking over mental work.
Robin uses printing as an analogy and asks whether this is replacement or the beginning of a new chapter.
Robin’s commentary (a July 2020 retrospective; see the verification note for the bond figures)
Reading guide
In July 2020, Robin looked back at Tesla’s financial turning point and considered whether a company solves problems and creates irreplaceable value. The original post explicitly described the amount and conversion price of the 2019 convertible bonds as a hazy recollection. Tesla’s Q1 2019 documents record a $920 million convertible-bond repayment, while its May 2019 pricing document gives an initial conversion price of approximately $309.83 per share, rather than the roughly $250 recalled in the post. The statements about Model 3, cash flow, and the share price in 2020 remain a retrospective from that time; this round of review did not reconstruct the complete timeline. Share prices use the basis applicable before the stock split and should not be compared directly with later prices.
Key points
The Q1 2019 convertible-bond repayment was $920 million; the original post’s roughly $1 billion was an approximation.
The May 2019 convertible bonds had an initial conversion price of approximately $309.83, rather than the $250 hazily recalled in the original post.
The statements about Model 3, cash flow, and the share price are a retrospective in the original 2020 post; the complete timeline was not reconstructed in this review.
Robin’s central question: Does the company solve problems and create irreplaceable value?
Reprinted compilation (the original post names Dedao / Wu Jun’s Letters from Silicon Valley; the exact installment remains to be confirmed)
Reading guide
The original post names Dedao / Wu Jun’s Letters from Silicon Valley and compares the investment approaches of Sequoia, KPCB, and YC. Some material about Sequoia’s three stages, explaining a business on the back of a business card, and a company’s DNA can be matched to the venture-capital chapter of Wu Jun’s 2008 Langchao Zhidian, but this does not establish the source of the entire post or confirm its other details. The accounts of KPCB’s investment outcomes and involvement with companies are relayed from the original post; they have not been verified by this site and do not describe current policy. YC emphasizes founders’ potential and mentors’ experience. Paul Graham’s own biography also names Jessica Livingston, Robert Morris, and Trevor Blackwell as cofounders.
Key points
The discussion of Sequoia’s three stages, technological leaps, and the back-of-a-business-card test can be partly matched to Wu Jun’s 2008 article.
The principles attributed to Bill Coughran are relayed from the original post; their complete source remains unconfirmed.
The historical accounts of KPCB’s investment outcomes and involvement should not be treated as the firm’s current policies.
YC was cofounded by Paul Graham, Jessica Livingston, Robert Morris, and Trevor Blackwell.
Robin discusses venture capital’s time horizon. A VC fund commonly lasts around 10 years, or as little as five to seven. Compared with mutual funds in the secondary market, VC is still a medium- to long-term investor: it must consider changes in trends in years and need not worry about daily fluctuations. Within the protection and constraints of a fund’s term, investments with a five- to ten-year horizon are most suitable. VC practitioners must sense which trends will unfold over those years and which are merely brilliant but short-lived fireworks. A 15- to 20-year outlook, however, extends beyond the fund’s life. Even if an investor correctly identifies an industry trend 20 years ahead, being forced to wind up the fund after 10 years may mean falling short halfway and paving the way for later investors. The lesson: understand your industry’s conditions and apply your strengths within them. Neither short-term nor ultra-long-term thinking fits VC.
Key points
VC funds commonly last around 10 years, or five to seven at the short end: they invest over the medium to long term and think in years.
A five- to ten-year horizon is most suitable; too short may be mere fireworks, while too long risks falling short halfway.
A fund must reduce its capital and wind up when its term ends: ultra-long-term thinking does not fit VC.
Understand the conditions you work within and apply your strengths accordingly.
Robin’s commentary (following an industry commentary article)
Reading guide
Venture investing has two kinds of mistakes: backing the wrong venture and losing the principal, or missing a venture and forgoing substantial upside. Ordinary VCs worry about backing the wrong companies; top VCs worry more about missing them. If just one company in a portfolio delivers a 100-fold or 1,000-fold return, the others can fail without ruining the outcome, greatly increasing tolerance for failure. By contrast, a creditor-like focus on protecting principal leads only to low returns and does little to encourage innovation. For Robin, the challenge and appeal of the industry lie in continually learning, accepting new challenges, and refining investment logic through both bad investments and missed opportunities. He urges Taiwan’s VC industry to be more ambitious: an internal rate of return of 15–20% is good, but higher targets can inject fresh momentum for innovation and progress into Taiwan.
Key points
There are two investment mistakes: backing the wrong company and missing the right one. Top VCs worry more about missing opportunities.
The logic of outsized returns: one 100-fold or 1,000-fold investment can offset the failures of the others.
A creditor-like mindset leads only to low returns and stifles innovation.
Robin’s hope for Taiwan’s VC industry: raise its ambitions and help drive industrial innovation.
Reprint (Buffett shareholder-meeting Q&A, with a source link)
Reading guide
In a shareholder-meeting Q&A, Buffett and Munger explain how they examine a business: look for a broad, enduring moat protecting a substantial economic castle, with an honest lord in charge. Under capitalism, however, every moat will come under attack, and most prove worthless. The task is to understand why certain castles have survived and what could destroy them in five, 10, or 20 years. Munger translates the honest lord into economic terms: low agency costs plus advantages of scale. They also distinguish businesses where you need to be smart only once, such as cable networks in an earlier era, from businesses where you must stay smart, such as retail, where the castle needs defending every day. In valuation, the moat and management inform an assessment of the certainty of future cash flows. No formula can tell you precisely that a moat is 28 feet wide and 16 feet deep; you have to understand the business. Berkshire’s good performance has come not from doing many brilliant things, but perhaps from doing fewer foolish things than most people.
Key points
A moat, an economic castle, and an honest lord: three elements for examining a business.
Every moat will be attacked, and most are worthless.
Distinguish businesses where you need to be smart once from those where you must remain smart.
Valuation is an art: the moat informs an assessment of the certainty of future cash flows.
A company so good that a fool can run it will eventually be run by one.
Robin’s commentary + a framework from another source (Lao Qi’s Reading Circle)
Reading guide
A framework from another source lists what investors look at in a venture: integrity, profitability, customer acquisition, key metrics, the team, runway, barriers to entry, market potential, and the competitive landscape. Robin adds his own comments: partnerships should benefit both sides, the business must be able to make money amid competition, and founders need to know their key numbers. At the end, he challenges the claim that the venture itself is unimportant, reaffirming the importance of the market and validation. Note that points such as a 12- to 24-month runway and refusing to invest without patents reflect particular investors’ preferences, rather than universal requirements.
Key points
The investor checklist: integrity, profitability, customer acquisition, metrics, the team, runway, barriers to entry, market potential, and competition.
Robin: build a partnership that benefits both sides, and know your key numbers.
The venture matters, as do the market and validation.
The checklist describes investor preferences, not universal rules.
Robin’s commentary + a framework from another source (Lao Qi’s Reading Circle)
Reading guide
Material from another source discusses support from angel investors, fundraising windows, and equity and exit arrangements. Robin adds two comments: trust is the foundation, and valuations should be reasonable. Raise somewhat more than you need according to the circumstances, rather than relentlessly seeking the highest valuation and the largest amount of capital. The examples in the source—raising 1.5 to two times the calculated amount, a 5:3:2 ownership split, and four-year vesting—illustrate particular scenarios, not universal rules. Equity, exit, and profit-distribution arrangements still call for expert advice.
Key points
A reasonable valuation matters more than a high one.
Raise somewhat more than you need according to the circumstances; more is not always better.
Trust is the foundation of the relationship with an angel investor.
The numerical examples are not universal rules. Consult experts on equity arrangements.
Robin’s commentary + material relayed from another source
Reading guide
Material from another source uses boxing and herd behavior in investing to discuss controlling default responses. Instinctive reactions are often wrong in investing, and markets are most dangerous at their most euphoric. In the final section, Robin connects the argument to entrepreneurship: building a business requires differentiation and a deeper understanding of fundamentals, rather than following the crowd. When everyone runs in the same direction, that is a reason to stop and think clearly about what you are doing. Going against instinct does not guarantee profits; it helps avoid responding passively.
Key points
Instinctive reactions are often wrong in investing.
Herd behavior fuels bubbles.
Robin: entrepreneurship requires differentiation and understanding fundamentals, rather than following the crowd.
Going against instinct is not a guarantee of profit; it is a way to avoid passivity.
Following a discussion of four investment principles, this piece explains venture capital’s power law: a small number of investments drive the returns of an entire fund. A story about YC’s top two companies illustrates the risk of missing exceptional businesses and the challenge of recognizing unconventional founders. Note that “better to back a hundred wrong companies” is rhetoric, not advice to make unlimited bets. No underlying data is provided for the returns of YC’s 200 companies, and the possibility of survivorship bias must be kept in mind.
Key points
The power law: a small number of investments drive a fund’s returns.
Missing an exceptional company is more costly than backing the wrong one.
Recognizing unconventional founders.
“Better to back a hundred wrong companies” is rhetoric, not betting advice.
Robin’s personal account + material from another source
Reading guide
Material from another source discusses developing interests and patience over time. Robin recounts 14 years in underwriting and investing, involving 25 transactions. He describes himself as conservative, with returns that are not particularly outstanding, but says his lasting motivation comes from helping small companies grow and a sense of mission to help Taiwan’s industries move up the value chain. The years and transaction count are his own account from 2021 and have not been independently verified; his self-assessment is not an external performance rating.
Key points
Interest and patience can be developed over time.
Robin’s own account: 14 years and 25 transactions in underwriting and investing.
The motivation comes from helping others build businesses and helping Taiwan move up the value chain.
Self-described as conservative, and driven by a sense of mission.
Robin’s commentary + material paraphrased from a foreign-language source
Reading guide
The foreign-language material argues that early-stage founders should not sacrifice funding opportunities or good investors over a small difference in valuation. An excessively high valuation can become a constraint and add pressure in the next round. Robin adds that the goal is to find long-term partners, not someone to take an investment off your hands. The amounts and ownership percentages are hypothetical examples, not advice on an actual transaction. The highest bidder is not necessarily the worst investor, nor is the public-market price an absolute benchmark; dilution and other terms still need to be assessed case by case.
Key points
Do not lose a good investor over a small difference in valuation.
An excessively high valuation can constrain the next round.
Look for long-term partners, not someone to take the investment off your hands.
A numbered digest of Wu Jun’s course material: John Doerr’s stealth-phase approach and independent perspective; the high margins and risks in the SGI case; and the value of a repeatable investment method and a network of companies that help one another. Performance figures have been left out of this guide, while the framework of looking at how the world may change is retained. The source’s numbering skips item 4 and is preserved. Details such as high margins being the sole cause of bankruptcy and the proportion of companies acquired by other portfolio companies have not been independently verified.
Key points
The stealth phase: develop quietly and maintain an independent perspective.
High gross margins do not mean an absence of risk.
A repeatable investment methodology.
The long-term value of a network of companies that support one another.
A compilation of three levels of business assessment. First, demand combined with scarcity allows a company to charge and make a profit. Second, technology changes what is scarce, so sustaining profits requires a moat. Third, scalability and pricing power determine whether returns can grow. Cautions: investors’ requirements vary; disruption does not erase all value overnight; controlling scarce resources also requires a workable cost structure and customers able to pay. Monopoly is not a prerequisite for growth, and any such position must comply with the law.
Key points
Demand + scarcity = the ability to charge.
Technology changes scarcity; sustaining profits requires a moat.
Scalability and pricing power determine the ceiling on returns.
The cash pressure of unit economics: customer acquisition cost (CAC) is paid up front, while customer lifetime value (LTV) takes years to realize. After finally reaching positive cash flow and profitability, founders face another decision: raise more money and increase spending again. Both founders and investors struggle with this choice; it takes foresight, patience, and resources. Caution: the original’s description of the CAC–LTV relationship raises questions about both direction and definitions. It is retained as written, has not been independently verified, and must not be used as a quantitative model. Reinvestment is not mandatory; it depends on resources and whether the expected returns can be validated.
Key points
CAC is paid up front, LTV realized later: the cash-flow timing gap.
The difficult choice of expanding again after reaching positive cash flow.
Foresight, patience, and resources are needed.
The original formula is questionable; do not use it as a model.
An examination of VC behavior through the influence people have on one another in finance: the industry has moved from an era of lone wolves to an era of the herd, with rotating hot sectors and increasingly similar investments. The argument favors independent judgment and perspectives from other disciplines as ways to look beyond consensus. Cautions: the “era of the herd” is an observation, not a statistical finding. Disagreeing with consensus does not make you right, and a cross-disciplinary perspective cannot replace professional due diligence. Independent thinking does not rule out exchanging ideas.
Key points
An industry observation: VC’s shift from lone wolves to the herd.
Rotating hot sectors can produce increasingly similar investments.
Independent judgment and cross-disciplinary perspectives help look beyond consensus.
A cross-disciplinary approach cannot replace professional due diligence.
Robin offers four points on long-term investing, then adds that wealthy people could consider a small allocation—say, 3%—to frontier investments such as venture capital, preferably with managers who have navigated cycles over several decades. A VC fund’s ten-year term, he suggests, forces investors to stay the course. Cautions: 3% is a hypothetical example, not Robin’s own allocation or a recommendation for yours. Not all funds have ten-year terms, and past experience does not guarantee an ability to identify the future.
Key points
Four principles for long-term investing.
A hypothetical small allocation, such as 3%, to frontier investments.
Preferably, managers should have navigated cycles over several decades.
A ten-year VC fund term forces investors to stay the course.
Robin’s own quoted observation + book excerpt (Surviving a Startup)
Reading guide
Robin’s observation: extraordinary returns come from the exponential growth that a company’s changes create. An excerpt from Surviving a Startup distinguishes two kinds of risk: risk in established fields can be controlled, while risk in new fields is unavoidable. It includes the Nike founder’s cash-flow bets and Robin’s self-deprecating suggestion that one might be better off remaining an employee. Cautions: the claim that a bigger leap in innovation increases the probability of a greater return has not been independently verified; taking more risk is not necessarily better. The account of Nike winning every time carries survivorship bias and is not a basis for advocating an all-in bet.
Key points
Extraordinary returns come from the exponential growth created by change.
Risk in established fields can be controlled; risk in new fields is unavoidable.
Stories of successful bets are subject to survivorship bias.
Three bootstrapping cases from Surviving a Startup, all starting with a real problem faced by the founders or their customers: Mailchimp, which reached $700 million in revenue and was later acquired by Intuit for more than $10 billion; Shopify; and Shutterstock. Companies can grow large without venture capital, but the figures, including market capitalizations and acquisition amounts, refer to the time of the original text. A founder’s own need is a starting point, not sufficient proof of a market.
Key points
Bootstrapped companies can also become large businesses.
Start with a real problem faced by you or your customers.
Intuit acquired Mailchimp for more than $10 billion, as reported at the time.
Your own need is a starting point, not proof of a market.
Book excerpt (the Unicorn Hunters series from Surviving a Startup)
Reading guide
The Unicorn Hunters series from Surviving a Startup looks at investing in teams. Smart investors bet on a team, not a particular idea or business. Startups are works in progress: even if their initial idea is wrong, a winning team will change direction and keep iterating until it finds a way forward. The CEO is the most important person on the team, yet investors’ most popular screening criteria can be traps. Elite universities select for test scores and extracurricular activities, not leadership. That mindset filters out rebels, free spirits, and late bloomers—neither Jack Ma nor Steve Jobs attended a top university. Senior VPs at major companies are often excellent executors, not natural risk-takers. Real due diligence goes beneath the résumé: how did the founder persuade cofounders to give up six-figure salaries for equity, what obstacles arose while advancing ideas, and what did they learn from failure? Outstanding leaders act like magnets, drawing people willing to take enormous, even irrational, risks to follow them. Almost nobody builds a unicorn alone; the CEO is the catalyst who gets everyone moving.
Key points
Bet on the team, not the idea: a winning team keeps iterating until it finds a way forward.
Elite universities and big-company credentials are the most popular screening traps.
Look beneath the résumé: decisions made, obstacles overcome, and lessons from failure.
Leadership is a magnet: it persuades talent to give up high salaries for equity.
Book excerpt (the Unicorn Hunters series from Surviving a Startup)
Reading guide
The Unicorn Hunters series from Surviving a Startup turns from the team to the market. A large market provides room for growth, exits, and follow-on funding. A company can start in a small niche, but it needs a path to expansion: a local bakery and a bakery chain are different businesses. VC needs large exits, not a tenfold return in a small market; if your market is inherently small, do not rely on VC. Note the book’s qualification: starting small is fine if the company can expand. Claims such as “smart angels do not invest in companies without follow-on funding” are too categorical. Fund sizes and strategies vary, and small businesses are not without value.
Key points
Large markets provide room for growth, exits, and follow-on funding.
Starting in a small niche is fine, but there must be a path to expansion.
VC wants large exits, not tenfold returns in a small market.
Small-market businesses should not depend on VC, but their value is not zero.
Book excerpt (the Unicorn Hunters series from Surviving a Startup)
Reading guide
The Unicorn Hunters series from Surviving a Startup examines market leadership: VCs look for a company's potential to lead its market, and price itself is an attribute of quality. Network effects, scale, and category recognition create real barriers to entry. Snap's move into mobile and teenage users, avoiding a head-on battle with Facebook, and Apple's transformation from a computer company illustrate category leadership. The author's call to give up unless you can be number one needs qualification: it applies where network effects and scale effects are pronounced, rather than serving as a creed for every business.
Key points
The potential to lead a market is a core VC criterion.
Network effects, scale, and category recognition create barriers to entry.
Snap entered from the side rather than confronting Facebook head-on.
The strong claim to give up unless you can be number one applies only under certain conditions.
Book excerpt (Xuan Tian's Finance and Innovation: A New Framework)
Reading guide
This excerpt from Xuan Tian's Finance and Innovation: A New Framework examines the kind of capital that supports innovation. VC supports innovation through active governance, knowledge networks, and funding. It tolerates short-term failure and offers substantial rewards for long-term success—precisely the incentive structure innovation needs. A fund's own fundraising structure and liquidity constraints affect its investment behavior: research finds that young firms become more tolerant of failure after successfully raising a new fund. Career concerns can work in either direction, making young managers more conservative or more aggressive; researchers have not reached a consensus. The dates and methods of the studies cited in the book have not been individually verified.
Key points
VC provides more than money: active governance, knowledge networks, and funding.
Incentives should tolerate short-term failure and reward long-term success.
A fund's fundraising and liquidity structure constrain its investment behavior.
Career concerns can affect risk appetite in either direction; the question remains unsettled.
In Jason Fried's fictional press release, Basecamp announces that it will stop generating revenue, pursue a higher valuation, and raise an imaginary dollar. A fictitious professor proclaims a $100 billion valuation and uses an absurd social-media-and-burn-rate formula to project 12 billion users by 2016. The piece satirizes valuations built on imagined traffic rather than business results. Its fictional framework must remain clear: Basecamp did not actually stop collecting revenue, raise one dollar, or receive a $100 billion valuation. The formula is not a valuation tool.
Key points
A fictional press release announces an end to revenue generation and a $100 billion valuation.
The piece satirizes valuations based on imagined traffic.
The fictional framework must not be taken literally.
This excerpt from Dedao's book-listening service discusses early customer acquisition: the four-step approach to entrepreneurship emphasizes targeted discovery rather than casting a wide net. Customers fall into five levels of urgency. Those at level four, already cobbling together their own solutions, and level five, already intending to pay, are your earlyvangelists. To cross the chasm into the mainstream, an existing market calls for clear differentiation in positioning; a new market calls for a complete solution for a niche or a tipping point driven by key people. These customers are not angel investors. A small early customer base permits deep validation, but does not eliminate the need for research.
Key points
Targeted discovery of early users beats casting a wide net.
Customers at urgency levels four and five are earlyvangelists.
Cross the chasm through differentiation in existing markets or complete niche solutions in new markets.
Small numbers allow deep validation, not the abandonment of research.
36Kr reported that Sequoia Capital restructured its US and European businesses on October 26, 2021. It established the permanent, open-ended Sequoia Fund as a parent fund; public-market holdings would return to it rather than face mandatory distribution. Sub-funds would remain closed-end, with investment returns throughout their life cycles flowing back to the parent. LPs could redeem annually, fee and carry arrangements would change, and employees could invest. Long-term ownership addresses the forced exits associated with traditional ten-year funds, allowing Sequoia to keep holdings that continue growing after an IPO. LP acceptance and the risk of concentrated redemptions test the structure, in contrast with traditional approaches such as Benchmark's. Fees, carry percentages, and fund sizes are those reported at the time, not today's terms.
Key points
The structure combines a permanent parent fund with closed-end sub-funds.
Public-market holdings return to the parent rather than facing mandatory distribution.
Annual redemptions introduce the risk of a run.
The model addresses forced exits under traditional ten-year funds.
This excerpt from Touzi Yilei discusses angel investing. The earliest opportunities may have no team or company, only an idea; the basis for a decision is the person. Knowing the founder deeply matters more than files, and a spouse, relatives, friends, or colleagues can provide useful perspectives. The book also contrasts stages: angels focus on the right tail of returns, while consensus among seasoned investment-committee members often produces mediocre choices. VC and PE rely more on data and success rates. Claims that a spouse is the only person to ask or that valuation is impossible are strong rhetoric. Returns of thousands or tens of thousands of times are exceptional possibilities, not typical outcomes; basic legal and accounting checks remain necessary.
Key points
At the earliest stage, the investment is in the person.
Deep familiarity matters more than files.
Angels focus on right-tail returns; consensus often produces mediocre choices.
Returns of thousands or tens of thousands of times are exceptional, not typical.